South Florida Fixer Upper Investment Property

If you want to expand and diversify your holdings beyond stocks and bonds, investment property is a good option for you. You will obviously need to do some serious bit of research and make sure that this is something you can handle. But on our part, we can give you some investment property advice and information to help you get started. Let’s start off with why you should buy investment property.

Why Buying Investment Property is a Good Idea

Real estate investment allows you to easily make a down payment and leverage your capital. This will increase the overall return on your investment. So as an investment opportunity this really is a very good opportunity.

In most cases, because of deduction in mortgage interest and depreciation, an investor will not have to pay any taxes on their cash flow. They can just sell their property in the future and enjoy their capital gains from that.

This is an excellent retirement plan. Many of us are not great savers but when you invest in real estate, it is a big commitment and you have to maintain it. At the end you will extremely grateful to yourself that you took a chance on investment property and built future cash flow for yourself. All this while your potentially helping home owners in troubled and difficult situations. There is no greater feeling than helping someone in a dire situation!

If you would like to sign up for our Cash Buyers Investor list, Then please visit

Palm Beach Investment Properties From $50k – $500k

Call Us Now For More Info! 561-370-8335

Residential Investment Property

What happens generally in real estate investment is that people buy fixer upper homes and fixer upper real estate and then sell those after fixing them up. Fixer upper home sales allow you to buy investment properties from people who want to sell them fast and at a discounted rate. So it is often seen as a cheap investment property and it can be if you make smart choices. You can get duped as well so to avoid that, keep these tips in mind for a smart fixer upper property investment.

Unless you are an expert in properties, you should always get the opinion of a professional before you make your investment. If you see a property that looks like a good fixer upper investment, examine it thoroughly yourself, and then get a professional to go over it properly. The house might look good to you but professional eye can catch problems that you might miss such as structural issues. You will have to pay the professional but it is better to pay a small amount right now rather than pay more when you discover faults within the property.

Some fixer uppers will cost more than others but do not spend too much on a house that will not bring you much return on your investment later on. Some fixer upper require very serious repairs and their very foundation might be weak. It is best to stay away from such houses and properties or you could end up spending far too much. Before you buy the property, make an estimate of the costs with the professional you hire and see if you can make a profit off the property off the future or not. You can use an investment property calculator for this. These calculators are designed with the aim to help you calculate the estimated costs and financial outcomes of your purchase and rent of your investment property.

Speaking of profiting, the location of the property is very important. You could fix the property very nicely but if the location isn’t desirable for many people, there is nothing you can do about that. Look for a neighborhood that has good security and properties with reasonably market values.

When it comes to actually fixing up the property, you should always hire the best people. You need to get quality work or it could become difficult to sell of the house at a good price. If potential buyers see good craftsmanship and quality products, they will be willing to pay a good price for your property. Of course, these are all expenses that you estimate before you buy the property.

The best investment property choice for you is to buy a house from cheap fixer upper homes sale in which the fixer upper homes sale owner needs to sell the house quickly at a discounted price. You will be able to get the house at price lower than the market value and you will get it quickly. But do your researches check all the records to make sure there isn’t any debt or lien on the house that the owner is hiding. And follow tips we gave above to avoid being scammed into buying a seemingly cheap house that will cost you a lot of money in the future and no returns.

What you do with your fixer upper investment properties depends on you. You can either fix up the property to sell it or you can use it as a rental property. With the first option, you sell the house and you are done with. But with the second option, you have deeply involved with the property even after you fix it up. This is because as a landlord you are ultimately responsible for the taxes and the upkeep of the place. Of course your tenants are required not to damage the place but there isn’t really a guarantee that you will find good law-abiding tenants. Of course, rental properties are also a good source of constant income. Many people have no jobs and simply live off the income they earn from their rental properties.

Sign up for our Cash Buyers Investor list

Palm Beach Investment Properties From $50k – $500k

Call Us Now For More Info! 561-370-8335

However, rental properties come with their own expenses such as:

Mortgage payment: with this you will have to consider both principle payments and interest payments. Additionally, if the down payment on your rental property is less than 20% of your property’s value, you will probably have to pay mortgage insurance premiums.

Property taxes: these depend on the area of your rental property but you should keep in mind at least 2% of your property’s value each year.

Landlord insurance: this is also a very important expense. You cannot simply expect your tenants to behave. There will be some damages, even big ones. So landlord insurance covers those damages caused by your tenants. The insurance will also cover you if a tenant gets injured on your property.

Maintenance and repairs: as a tenant you will have to make sure that your rental property is maintained and in good condition. This means any repairs or replacements necessary such as windows, walls, carpeting, paint, etc. may have to be repaired or even replaced. After a tenant leaves, you have to go over their space and take care of any maintenance costs such as repainting, cleaning and repairs. While interior paint should be done in between tenants, exterior paint can be done every 5 years.

Advertising for tenants: to attract any tenants you will have to give ads in newspapers and on websites. Some websites like Craigslist will let you do it for free but some will take some small fees from you. When you do get applications from tenants it is always good to do some background search on them and see their tenant history if possible. This may also take up some of your expenses.

Home owner’s association fees: if you sign up your property to an HOA, it has some fees as well.

Rental profits

While you will have to incur some expenses, rental properties are not without their profits which is why we are writing about them in the first place. A good rental property in a secure location is what anyone is looking for. If your rent starts bringing in enough income to exceed your rental property expenses, that is a very good sign. However, if that doesn’t happen immediately, don’t panic. These things can take time and it might be that rents are low at this time. Eventually you will start getting regular tenants and your rental property will start giving reasonable return.

Investment property tax deductions

If you rent decide to rent out your fixer upper investment property, you need to understand how tax deductions work. First, you need to decide whether you are a real estate professional or a passive investor. Simply put, a passive investor is someone whose profession is not in the real estate. A professional investor is someone who spends at more than half of their working time doing real estate rental business.

When it comes to rental properties, there are some tax deductions that you can claim and some tax deductions that you cannot claim.

Tax deductions on rental property you can’t claim

These are expenses that you cannot claim on rental property

Any personal use of the rental property

If you have borrow against the equity in the investment property for your own private use you cannot claim borrowing costs

The utility bills that your tenant pay

Any costs incurred during the purchase or sale of your investment property (this goes for rental and sale investment properties)

It is important for you to keep a very detailed record of your spending when you begin your investment. Because many of the costs related to purchase and sale of the investment property may be added to the cost base (this is the purchase price of the property and the costs for its purchase and sale).

Tax deductions on rental property you can claim

There are a number of management expenses of your investment property’s income that you can claim. These include

Real estate management fees

Travel expenses to investigate your property (within reason)

Insurance

Advertising for new tenants for your investment rental property

Depreciation on good in the property like air conditioners

Insurance

Interest on loan for the investment

You cannot make any taxation claims without proof and the right official documents. You need to keep a detailed record, as mentioned above including all of your receipts and bank statements.

We mentioned that you can claim interest on your loan for the investment property. Here is how an investment property loan works.

South Florida Investment Properties At 30-50% Below Market Value

Investment Property Loans

As we said before, investment property is a great idea but it is not always easy to get a loan on an investment property. Many banks see investment property loans as riskier so it is not easy to qualify for this loan. These are some of things that banks look at when you apply for an investment property loan:

Debt-to-income ratios: they will see how much you make each month and compare it to what your debt payments are for each month. The ratio of debt-to-income that will qualify you for a loan depends on how much loan you want and also the bank you are going to.

Credit score: you probably already know this but your credit score is extremely important and a poor credit score will make it harder for you to get a loan. The lower you score are the more costs you will have to incur. So try to improve your credit score as much as possible.

Your job: most banks want to see that you have a stable job and have spent at least two years at it. You can change your jobs but it is not advisable. Try staying in the same field as your old job. Since a steady income is very important for banks, it is harder for retirees to get a loan.

Tax returns: your income is verified with you tax returns so if your income claim is very little, getting a loan is not going to be very easy.

You also need to keep in mind the investment property interest rates. They can fluctuate by varying degrees, going up very high or low. It is obviously in your interest when the interest rate is lower so keep that in mind when you are applying for a loan.

South Florida Investment Properties At 30-50% Below Market Value

Call Us Now For More Info! 561-370-8335

Get Your Fair Cash Offer: Start Below!

We buy houses in ANY CONDITION in Florida. There are no commissions or fees and no obligation whatsoever. Start below by giving us a bit of information about your property or call (561) 370-8335...

Property Address

Name*

Phone*

Email*

Phone

This field is for validation purposes and should be left unchanged.

Hear What Others Have To Say…

“I am real estate broker and have worked with Rob in the past to get a home SOLD. What impresses me the most about him is how forthright and honest he is. I have read the other reviews here and that seems to be the central theme. That’s because it is really the case with him. I trust him like I would trust my own brother. Maybe more. LOL. Him and his team take great care in making sure every detail is addressed for a win-win outcome for everyone. Rob also has a great ability to come up with solutions in the toughest of circumstances. Not everything is always clear cut. Thinking outside the box is a gift Rob and his team have. If you have a house to sell and you run into Rob you can be sure you have found the “real deal”. He will get you out from under and on your way in no time. I see him in action and actions speak louder than words. He will do what he promises.”

Bettina Robson

“I have worked with Rob for the last 15 years and found him to be extremely dependable, reputable and he does what he says he will do. I have personally seen Rob and his team help numerous homeowners resolve what seemed like insurmountable problems at he time. He has always been trustworthy and works in the best interest of the property owner.”

We are a family run real estate solutions and investment company. We specialize in helping troubled homeowners sell their house fast, ridding them of that burdensome with one phone call. We are not realtors, we are investors and problem solvers who can buy your house fast with a fair all cash offer.
We Pay Top Dollar, Can Close Quick & Promise Not To Waste Your Time!